Yahoo buys Admovate to ramp up its mobile advertising

The technology could bring new mobile ad products in the coming months, Yahoo says

Yahoo has bought ad tech startup Admovate to grow its mobile advertising sales and provide a stronger channel for personalised display advertising.

Terms of the deal, yet another in a major buying spree for Yahoo this year, were not disclosed.

Four employees at Admovate, which has been headquartered in Mountain View, California, will be joining Yahoo's display advertising team at Yahoo's headquarters in Sunnyvale, California, a Yahoo spokeswoman said in an email.

Through its technology, Admovate claims to enable advertisers to create and deliver personalised, hyper-local targeted offers through the mobile channel. "This is especially important for mobile ad experiences that engage consumers on smaller screens," said Scott Burke, senior VP of display advertising and advertising technology at Yahoo, in a Wednesday blog post.

Admovate's services would provide a much-needed boost to Yahoo's display ad revenue, which fell by 11 per cent for the quarter ended June 30, Yahoo reported Tuesday.

Following Marissa Mayer's appointment last July as CEO of Yahoo, the company has gobbled up more than a dozen small tech startups, but Admovate stands out as an advertising purchase, and one that is not focused on consumer products.

Yahoo, which has struggled to compete against Google and Facebook's mammoth advertising operations in recent years, introduced two new ad formats in April: stream ads, a form of sponsored advertising incorporated into the company's newly launched news stream; and the Yahoo.com Billboard, providing richer content like movie trailers that let users buy tickets from within the ad.

In February, Yahoo reached a global advertising deal with Google to place more ads across its Web properties like Yahoo Sports and Yahoo News.

The company also operates its Right Media Exchange, an ad-buying platform for digital advertising companies, which includes differentiated ad networks, direct advertisers, data providers and global agencies.

The acquisition is part of the company's efforts to invest further in these types of ad tech platforms, Yahoo said, to "make buying easier for advertisers and agencies." The deal could yield new ad products for Yahoo's global advertisers and partners in the coming months, the company said.

"We are investing more deeply in programmatic buying and mobile advertising," Yahoo's Burke said, adding, "Admovate's personalization technology accelerates our capabilities in mobile advertising, and we gain an exceptionally talented technical team."

Yahoo's smaller acquisitions this year, which also include Xobni, GoPollGo and Astrid, may indeed be geared more toward acquiring talent than the products themselves, Mayer and CFO Ken Goldman signaled Tuesday during the company's second-quarter earnings call.

"In lieu of hiring, we've acquired these companies ... for talent and expertise," Goldman said. And, "We're going to continue the pace of doing these smaller deals," Mayer said, which she referred to as tuck-in acquisitions.

In the past 12 months, Yahoo has grown its dedicated mobile team by a factor of six, Mayer said, going from dozens of engineers to hundreds of engineers.

Beefing up its ad technologies, particularly in display, will be a focus at Yahoo during the remainder of the year, Mayer also said during Tuesday's call.

Few additional details about Admovate's products or services, which may not even have launched yet, are given on the company's website.

"We'd like to thank everyone who supported us along the way: Our partners, our advisors and our investors," the landing page reads. Admovate was founded just last year.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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